Recent changes now permit certain foreign companies and their representatives to directly hire Cuban workers, leading to an inevitable question: If the foreign entity is the employer, can they also pay wages directly in dollars?
The answer is not straightforward. While direct hiring may bypass the need for a state employment agency in some instances, it does not automatically translate into salaries being paid in foreign currency.
The Complexity of Currency in Wage Payments
Cuba’s updated Labor Code is clear: wages are paid in Cuban pesos (CUP). However, other regulations allow for some workers to receive bonuses in foreign currency, which is legally distinct from a salary.
Changes Brought by Direct Hiring
Decree-Law 137/2026, published on October 2 in the Official Gazette No. 82, permits foreign commercial representatives in Cuba to directly employ workers. Previously, hiring was required to go through state-approved employment agencies.
This change was reported by CiberCuba following the release of the new regulations. Resolution 62/2026 from the Ministry of Labor and Social Security outlines that foreign commercial representatives can choose to hire directly or continue with an employment agency. If they choose direct hiring, they must adhere to Cuban labor and social security laws.
Wages vs. Bonuses: Understanding the Distinction
The Labor Code specifies that wages must be paid in Cuban pesos, at least monthly, through cash, bank instruments, or electronic means. Direct hiring does not inherently allow foreign firms to pay salaries in dollars, euros, or other foreign currencies.
However, an important distinction exists between a salary and bonuses. The Labor Code allows for additional income from bonuses in foreign currency, which does not replace the obligatory salary in CUP.
Foreign Investment Law and Currency Bonuses
The updated Foreign Investment Law, Law 118, states that mixed enterprises and fully foreign-owned companies can create incentive funds from their profits, allowing for bonuses in foreign currency if the investment modality generates them.
This means workers can receive a salary in Cuban pesos and additional payments in foreign currency under specific legal conditions.
Not All Foreign Companies Are Equal
Foreign commercial representations do not automatically fall under the Foreign Investment Law's modalities like mixed enterprises or fully foreign-owned companies, which have been granted more flexibility in hiring since September 2026.
The recent reforms extend similar hiring flexibility to foreign commercial representations through Decree-Law 137 and Resolution 62.
The Role of Gratifications in Foreign Companies
Cuban law acknowledges bonuses for workers in foreign branches and offices. The 2026 State Budget Law references bonuses for workers at foreign commercial branches and other foreign entities in Cuba. However, recognizing a bonus for tax purposes doesn't equate to converting it into a salary or replacing the mandatory CUP salary with a dollar payment.
Bank Regulations and Authorized Payments
Banking regulations add another layer of complexity. The Central Bank of Cuba’s Resolution 102/2026 allows for foreign currency transfers related to authorized remunerations, bonuses, and per diems.
The key term here is “authorized.” This resolution outlines how foreign currency payments can be executed if legally permitted but does not change labor laws or provide a general allowance for dollar salaries.
Implications for Cuban Workers
When a foreign commercial representation opts for direct hiring, the worker signs a contract with the representation itself, which assumes employer responsibilities. This change ensures that workers already employed by these representations do not receive lower incomes after the transition.
For foreign investment modalities, similar provisions apply, allowing direct hiring and associated labor obligations without the need for a state employment agency. However, who hires does not change the currency in which wages are paid.
Can Foreign Companies Pay Salaries in Dollars?
Direct hiring alone does not authorize replacing the legally mandated Cuban peso salary with a dollar-based salary. The Labor Code maintains the requirement for salaries to be paid in CUP.
Nevertheless, bonuses or additional income in foreign currency may be permitted for certain companies and representations, as outlined by applicable regulations.
FAQs on Foreign Employment and Currency Regulations in Cuba
Can foreign companies in Cuba pay salaries in dollars?
No, salaries must be paid in Cuban pesos (CUP) according to the Labor Code. However, bonuses in foreign currency may be permissible under certain conditions.
What changes have been made to foreign hiring practices in Cuba?
Foreign commercial representations can now hire workers directly without state employment agency intermediaries, but they must comply with Cuban labor laws.
Are bonuses considered the same as wages in Cuba?
No, bonuses are legally distinct from salaries, which must be paid in CUP. Bonuses can be in foreign currency if authorized.